On Balance, Responsibilities, and the Future of Lending: Neil David, Wells Fargo

Intro

Every month we’re interviewing real estate professionals in Chicago to get their perspectives on the market, career tips, and industry trends. Today we’re talking with Neil David of Wells Fargo Mortgage.

Neil is not your typical mortgage broker. Outside of his varied interests from Formula One racing to photography, Neil takes one of the more unique views of his career I’ve heard in a mortgage broker: a “debt management consultant.”

Neil David

Neil has worked across several areas of Finance — from bank teller to personal banker to mortgage officer, and that’s afforded him a great ability to see the forest from the trees with his clients.

We cover Neil’s background, trends in the industry, and what agents can perhaps do better when working with mortgage brokers. I’d highly recommend Neil here in Chicago, and he can be reached at [email protected]

Neil and I meet back at the Cabana Club at The Robey Hotel in Wicker Park over a couple drinks to chat mortgages, working with real estate agents, and the potential backward nature of the home buying process.

The Highlights

The full transcript can be found below, but here’s the cliff notes:

Having the marketing capacity, training, and a solidified structure and process was what I really liked and what I look for in companies, too and all those things really stood out for me.

Neil walked into the mortgage business as an opportunity to get licensed, hone his finance skills, and help people. Working for a top company that offers formal training and mentorship is key to anyone starting out in the industry.

I found balance and I try to find that in every aspect of my life. I don’t want to be known as “Neil: Loan officer” — I crunch numbers at work...I crunch numbers in Excel, but I try to bring form and function in everything I do.

Being a creative in a traditionally non-creative role has it’s challenges, but mortgage bankers (or any professional) who can connect on different levels with different people can successfully build trust.

My process is get to know someone individually, get to understand where they stand personally because this is a big purchase, and then educate them and be an advisor and really hold their hand (where needed).

Mortgage brokers who take the time to educate clients as opposed to simply checking the boxes will reap the long term benefits of a more successful career, and ultimately build a book of repeat business.

Most people view this an investment, but how I really turn around mortgages is looking at my role as a debt management advisor: how can you manage your debt with the lowest cost, and use it in a way with the knowledge you have and stay within the rules to get a house?

Mortgage brokers’ responsibilities stop at the fiduciary line, but there’s plenty of ways Neil can offer guidance and advice, which he routinely does, to ensure his clients are making the right choice for the long term.

No, it’s completely backwards. There’s a big misconception that you need to go to the agent first, because it’s an emotional process. To me, the first step is finding a loan officer you can trust.

Neil argues that home buyers should first consult with a mortgage banker before an agent to set a realistic price point, understand the challenges of buying a home and closing, especially when home buyers are searching on Zillow long before they connect with an agent.

Just be open to learning.

Agents who take the time to learn the basics of Finance and the mortgage process will make the relationship more harmonious, to the benefit of the client. How valuable would an agent be if they could quickly quote the monthly price difference at different rates between two homes their clients had just seen?

Full Transcript:

Austin: Let’s start with an easy one, tell me about yourself and how you ended up in the mortgage business?

Neil: Background, I was born in the South, moved to Bombay, India when I was two, my mom was a high school teacher there, and I grew up there until I was six. My great uncle was in Chicagoland from the ‘70s and we came to here in November of ‘93 from the warmest place on earth to what felt like the coldest place on Earth. I grew up in Glenview, moved to the city in 2007 and have been living and working here for the last 11 years.

Personally, I’m big fan of motor sports — Formula One is my thing — photography, fashion, technology (Austin: you’re all over the place!), I’m very multifaceted in that aspect…music...I’ve always had a creative side and analytical side of me and I think that’s where most of these interests come from.

How I came back into mortgage finance is sort of an irony, because I never thought in a million years I’d work in banks again. I did retail banking since I was nineteen and worked for TCF, Fifth-Third, JP Morgan, and a credit union in that time period (2006–2011) then I made a shift to business to business sales because I did retail so long and I got tired of the consumer aspect and I was young, where people treat you like crap and I didn't like sales. Then I stumbled back into it, did that from 2011 to 2016.

It was good, I learned a massive amount but as I was evaluating long term career progression, knowing some things look great when you walk into it, looking at the big picture, I knew I could be dispensable. I saw a documentary about the foundational fathers of entrepreneurship in America and asked myself, “What did we do before we were manufacturing kings?” and that slowly started diminishing as we started to transition to financing. So I’m thinking “finance is our best product” and how do I segue into that? I evaluated two segments: become a financial advisor or go into the mortgage profession. I interviewed at JP Morgan but I didn’t have client book of business with one to two million to bring onboard. Mortgages gave me the opportunity to get licensed, hone my skills in finance, help people, and combine where I fit in well.

I was at Guaranteed Rate because they offered licensing, but it was an online call center. I was good at inside sales, but I wanted to be personable and work with people, and that’s why I came over to Wells. Whenever I make a transition I try to evaluate where that company stands in its industry and in its niche and I’ve been fortunate to partner up with some of the top companies in their space. So I had the opportunity to work for the number one mortgage loan originator. Having the marketing capacity, training, and a solidified structure and process was what I really liked and what I look for in companies, too and all those things really stood out for me.

A: How do you find the ability to express yourself creatively in an industry, or rather a role, that traditionally is not creative in most aspects?

N: I found balance and I try to find that in every aspect of my life. I don’t want to be known as “Neil: Loan officer” — I crunch numbers at work…I crunch numbers in Excel, but I try to bring form and function in everything I do. So how I draft my Excel spreadsheets and to create databases and how it’s designed is where my creativity comes in but how I structure it is how my analytical process comes in. As a human, I’m a procrastinator, so I know I can’t stay complacent and if you look around us, the world is always changing and I’ve learned to refine the process and reflect and go along with it. You can always have a great plan but execution can be hard.

I try to find outlets outside of work, too. I shoot photography outside of work and have been trying to develop my skills and build an Instagram audience to promote that. I try to take the skills I have and apply it to different aspects of my life, and try to foster things that interest me.

A: It sounds like your life is well-rounded. Does that help you as a mortgage broker? I’m sure you’re better to work with than a lot of people who just check the boxes.

N: It’s hard to convey that initially when you’re trying to earn the clients trust. As you move further in the process, my goal is to make this an easy and enjoyable experience.

A: What about clients, how many are like minded?

N: It’s a problem I run into all the time. In this market people are looking for the best rate possible. I try to approach it genuinely as trying to learn about what you want, then next up is not to sell you, but to educate you to know as much as I do. What I do is not overly complicated, the nuances — yes I do know, but overall I can educate someone from beginning to end, step by step, and things that we can anticipate down the road.

My process is get to know someone individually, get to understand where they stand personally because this is a big purchase, and then educate them and be an advisor and really hold their hand (where needed). Most people don’t realize when they’re buying a home they’re dealing with two sales people, and people don’t like dealing with sales people in general, everyone loves to buy and nobody love to be sold, so for them to find someone they can trust is critical. We use that word frivolously, but I generally want to help people — I want to earn the business — but I want to help people and I want to be an advisor to them.

A: You mentioned being an advisor. Let’s talk about that. You don’t have a fiduciary responsibility, so how do you balance certainly the need to grow your business with ensuring you’re not giving someone more than they can reasonably borrow, legally?

N: Great question. The best way to do that comes down from my experience being a personal banker, being a teller, understanding what goes into managing investments. Most people view this an investment, but how I really turn around mortgages is looking at my role as a debt management advisor: how can you manage your debt with the lowest cost, and use it in a way with the knowledge you have and stay within the rules to get a house?

Most people stay in their mortgage for on average 5–6 years, and needs change: for example as you start building a family, do you want to rent it out? It’s really understanding and teaching people a mortgage isn’t a life sentence for 30 years, and there are other avenues you can take and we need to understand where you are. Most people are very open to a financial advisor and, “These are my goals and this is what I want to do” and when it comes to buying a home it’s how much can I afford, and understanding that and teaching them about credit, or how to manage an ARM, for example (great teaser rate but how long are you going to stay in the home)? It’s about teasing all that out.

A: You talked about the process, home buyers today are certainly coming to agents more informed. They know Zillow, they have a ballpark estimate of affordability. Are people as informed on the mortgage side?

N: No, it’s completely backwards. There’s a big misconception that you need to go to the agent first, because it’s an emotional process. To me, the first step is finding a loan officer you can trust: someone who can educate you, teach you about the process. You may be able to max out your affordability on paper, but are you setting yourself up for the next five, ten years?

A: So people don’t come to you with the view of the forest from the tress?

N: No, then they’ll go to an agent, and sometimes they’re putting in offers they don’t have financing squared away for. I don’t know why the industry works that way, but it is that way.

People go to Zillow, tech has allowed us to search for the home first, and mortgage isn’t sexy…and these are things we’re not proactive about. And these are things that are considered “adult-ing”, you have to be proactive about — my house, my career, my relationships, the maintenance on my car, my financial wellness — these are things you, not every single day, but have to keep a pulse check on. I think I’m on a rant here, but it’s a toppled system right now, and even the way the industry was pre-2008, was really screwed up. (Personally) I wouldn’t give 50 bucks to someone who wouldn't pay me back and here we are giving away hundred of thousands of dollars willy nilly it feels as an industry at times.

A: So what would you change in the industry? How do you hold yourself accountable?

N: How I hold my self accountable is being transparent in the process start to finish. That’s regardless of if the news is good or bad to the client. Managing my business with integrity is what I can control and my clients and partners will see that working with me.

A: So let’s move gears to the tools you use and how can the process get better? What’s Wells Fargo’s tech like?

N: Everyone is moving to software-as-a-solution. Our loan origination software is completely online. Being a bank and being number one, there’s a lot of rules and regulations and boxes we have to check. The mortgage industry is changing, but this industry seems to be a bit slow. I can work remotely anywhere, there’s no more inside/outside sales, in my role I’m both. It all comes down to how you manage it.

The tools we have, I’ll say I cant imagine doing my job 10 years ago and I feel like Wells was technologically advanced then. Now being able to get and access leads form my phone at any time is great, but you still have to be efficient. Gary V. says you can have the best wrench but if you don’t know how to use it, it’s not worth anything. It’s all about tools and structure, and having good tools in place does help me do a lot more.

A: What’s unique about Wells? Why would I come to Wells?

N: What’s unique about Wells’s is its competitive pricing, excellent technology and operations, and top class service. All this to get a client to the finish line. We are the best one in execution.

A: What advice would you give to agents to make your life easier?

N: I would say learn and be engaged. Not much I can give on my side, but what I can see is when you give answers you don’t know what you’re talking about regarding financing, it can misconstrue the situation because they’re often the first contact, and sometimes they’ll go to an online lender, and they don’t have all the answers either. So being engaged and understanding a little of the financing aspect, the loan officer that they’re working with will have a more harmonious relationship, which ultimately benefits the clients.

Just be open to learning. Personally, I’ve worked a lot and when I’m around people that share different perspectives than myself and that’s provided the most growth for me.